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Increasing the Minimum Wage hurts those most vulnerable in our society.

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Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

@ myself

I made a huge error in calculating the cost of the increase in the minimum wage from $8/hr. to $10.10/hr. for the 560,000 federal workers who are actually going to get it if Obama goes through with his "unilateral" implementation. It's going to be $2,352,000,000/year. The $1,176,000 per year figure I had originally was for one hour, not one year. Of course if it were possible to pay for this increase out of the money the federal government spends in one year on "waste, fraud, and abuse" (ie., about $261 billion), the feds could cover the cost for about 111 years.

Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

Originally Posted by JimJones8934

No, I said that it was regulated and that those processes are directly influenced by the laws mentioned. That they are not just free agreements between a union and a company.

Your exact quote was: "Yes but my reference shows that they apply to other companies or employees within that sector by law.[/quote]

Emphasis mine. Either support that your link makes that claim or retract this claim.

Originally Posted by JJ

3. You are not arguing "against wage restrictions" in toto but only those that don't involve the government.

You have stumbled upon perhaps the most sophomoric interpretation one could. Congratulations.

If a company makes me an offer of employment and I accept it and sign the contract, that doesn't constitute a "minimum" it constitutes a contract. The fact that I am doing it collectively doesn't change that it isn't a "minimum" but an agreed to number. This is like saying that a price tag in a store represents a "price control." Its a silly argument. I'm not sure how you can't see the difference between an agreed to price by two parties (even when one party is a union) and a price established by an outside third party.

Originally Posted by JJ

The you changed the argument in #26 to

The fact that you think this represents an argument change highlights that you never read the OP and have failed to follow any of my posts with intellectual seriousness. That argument was copied and pasted from the OP. It was also copied and pasted into several posts. Using ctrl+c and ctrl+v doesn't represent a change to the argument.

Originally Posted by JJ

1. The sky actually isn't blue - it is night-time.

And this is why you can't be considered a serious entrant into the thread. You make statements like: "you still need to define minimum wage" indicating that you have absolutely no economic familiarity with the subject and aren't serious about handling it honestly. You are here to find a fallacious scenario that you believe gives your side an "out" and nothing more. In the example I used it was clear that I was talking about the day time sky. That is clear from the initial statement, the claim, the academic references, etc. Just as here it is abundantly clear what is meant by "Minimum Wage" a term that has a precise legal and economic meaning and which no one, pretty much anywhere, would misunderstand except you.

Originally Posted by JJ

Then you just need to accept that yes, the picture could be shopped, so I will remove it from my support.

Not at all, I've countered your objection to that evidence and you've offered no support as to why my rebuttal doesn't apply. Clearly, that rebuttal didn't convince you, which is fine, and you are free to reject that evidence personally and move along to the rest of the argument. But that I have rebutted it and that you have failed to rebut that rebuttal isn't really a matter of dispute or relevant to the thread.

Originally Posted by JJ

No, it is being deliberately ignored

Yep, exactly.

Originally Posted by JJ

Strange way to phrase slavery and child-labor as being an 'unemployment aspect' - are you suggesting that these should not be the case, that there should be literally no minimum wage at all, including zero? Are you also arguing that H&S laws are also burdensome to the point that it is better to have people working in poor conditions than not at all?

First, I should point out that Slavery is not a market condition. Slavery only exists where laws allow for that legal status of a person. The closest market based condition is indentured servitude, the relative merits of which we can discuss elsewhere.

Second, yes, I am suggesting that there should be no minimum wage at all. The implication you are offering is that then wages will then move towards zero. Which is a tacit assumption of monopsony power on behalf of employers and not representative of empirical observation or basic incentive analysis.

Third, I am not making any specific argument in this thread concerning other regulations. However, to the extent that health and safety regulations impose a cost on employers, yes, they do cause unemployment. I would be surprised if you could find an economist who would disagree with that. If you wish to discuss whether or not that is the case or if you wish to discuss the relative cost/benefit of those regulations please do so in a separate thread.

Originally Posted by JJ

But we're not in the 1800's! It doesn't matter how they were originally formed -- unless they are like that now, this has nothing to do with the current 2014 world we live in!

Right..history has no bearing on today, huh?

Further, you missed the point of that analysis, which was to show that the unions were formed to cause unemployment within a certain industry in order to drive up wages. That they still perform this function is beyond any credible doubt, regardless of motive.

Originally Posted by JJ

Agreed but you haven't sufficiently defined what you mean by minimum wage at all

If you wish me to define a basic term in both law, economics and common parlance I am happy too.

Minimum wage laws set legal minimums for the hourly wages paid to certain groups of workers...

Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at the following rates:

Does an increase in minimum wage lead to marginally larger unemployment? Yes or No?

Originally Posted by JJ

Why shouldn't it be unilateral? He's the CEO of all federal employees!

You really have no idea what he proposed do you?

He isn't talking about government employees, he was talking about contract employees for the government. Government wages are set based upon the GS scale, which is salary based, not hourly based.

Originally Posted by JJ

A private company could totally up their budgets - it's called having less profits.

Ok, lets go beyond what Thomas Sowell called "Stage 1 thinking" and see what the result of that action would be.

Company A decreases its Net Income by increase costs and keeping Revenues constant. That would lead to two immediate results.

1) A decrease to the "Retained Earnings" account on the balance sheet, which is the account a company uses to fund future growth, including hiring. That means that an opportunity decrease in that account would lead to a relative decrease in the number of future workers hired (IE relatively higher unemployment).

2) It would also decrease the NPV of all future earnings, which reduces the price of the stock, which is the same thing as saying it reduces the rate of return for equity holdings. Putting aside any merit the stockholders have to that return (after all it is their life savings that allowed for that job to be created), objectively we can say that this decrease would increase the cost of capital not only for equity, but for debt as well (this is in compliance with the basic tenets of WACC (weight average cost of capital), but you would get the same conclusion using any other finance theory). That means that the relative cost of capital is higher leading to two results. a) Less capital available for growth (which adds to problem 1) and relatively higher debt interest payments (which exacerbates problem 1 by increasing costs).

So the result of your proposed solution would be to have three drivers working to reduce future growth of the company and thereby future employment opportunities for workers.

Hence, your solution still causes marginally higher unemployment.

Originally Posted by JJ

So if the managers want to maintain their level of profits (i.e. pay themselves) over the needs of their employees then that is their decision.

You realize that managers are not the same things as shareholders right? That managers are not paid out of profits, but that their wages are in the same cost account as any other employee right?

"Suffering lies not with inequality, but with dependence." -Voltaire

"Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton

Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

Originally Posted by Squatch347

1) A decrease to the "Retained Earnings" account on the balance sheet, which is the account a company uses to fund future growth, including hiring. That means that an opportunity decrease in that account would lead to a relative decrease in the number of future workers hired (IE relatively higher unemployment).

This assumes that future hiring was possible, or wanted and that worker productivity remains constant, instead of growing.

Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

Originally Posted by CowboyX

This assumes that future hiring was possible, or wanted and that worker productivity remains constant, instead of growing.

Worker productivity is irrelevant. It is sufficient that any changes in productivity are constant across the two scenarios. Are you implying the sometimes used "a higher minimum wage makes workers more productive" argument?

"Suffering lies not with inequality, but with dependence." -Voltaire

"Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton

Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

Originally Posted by Squatch347

Worker productivity is irrelevant. It is sufficient that any changes in productivity are constant across the two scenarios. Are you implying the sometimes used "a higher minimum wage makes workers more productive" argument?

No. But, yes, that's another argument.

Additionally, it assumes the worker has some responsibility or implied concern for the company's growth or other hires.

It is a fallacious argument of course, but it is one often put forward. If higher pay were to increase worker productivity, why isn't it being offered now? Why are employers leaving that potential profit on the table?

Originally Posted by cowboy

Additionally, it assumes the worker has some responsibility or implied concern for the company's growth or other hires.

Not really. In fact, it assumes the opposite. I fully recognize (and point out in this thread) that current employees have an incentive to limit their competition and will do so with regulation when offered the chance. There is no real difference here between employees seeking to price out competition and employers using regulations to erect barriers to entry to prevent new companies from competing. It is no accidence that both of these principles are discussed in the same chapter in micro-economics books.

But that doesn't mean that we as a society do not have a responsibility or interest in the hiring of future workers.

And all of that can be laid aside if we stick to the conclusion in the original OP: " Specifically, the minimum wage negatively affects employment for those workers most vulnerable to economic fluctuations, low skilled workers."

Do you disagree with that conclusion? If so, why?

Additional data and argumentation.

First, and this is relevant to the data JJ takes issue with, Cato has some data on European Youth Unemployment rates. Now to forestall his current argument, I will point out that younger employees are less likely to be covered by a collective bargaining agreement and as such his argument carries less weight. The numbers are somewhat understated as well given that they are proportions of a much lower employed group. (IE 10% of a group that has 90% employment represents a larger coverage group that 10% of a group that is only 5% employed).

This is especially telling because the countries referenced and the timeframe referenced mitigates the effects of the disincentive to work caused by social support policies, forestalling that as a reasonable explanation for the difference.

Murphy notes, correctly that the relatively small number of studies purporting to show that increases to the minimum wage has no effect on employment have all been dramatically under powered. This is a statistical term (and a basic calculation found in most of these papers) that, in this case, shows that even if there is a significant result, the study is incapable of finding it. IE, it doesn't matter if there is or is not an effect present, the study will report that there isn't one based upon it's setup.

He also makes a great addition to my argument earlier by pointing out that the increased unemployment is actually higher than I noted because of an additional driver. The increased price induces employers to higher less (decreasing demand) while simultaneously signaling people to increase supply.

However, in our example, the supply curve (by construction) is a more typical shape, such that the large increase in the wage rate leads to a large increase in the number of workers seeking employment—500,000 in our scenario. There is now a significant amount of involuntary unemployment in the market for low-skilled labor; the unemployment rate would skyrocket.4

Even though (by construction) our hypothetical minimum wage has not significantly reduced total employment, it has, nonetheless, drastically impaired the functioning of the labor market. The "glut" of workers on the market means that non-price allocation mechanisms must come into play. Since there are now multiple applicants for a given job opening, employers can rely on other criteria, including racial and class background, to choose which worker gets the job. It is much more likely that an applicant will need to "know somebody" to get hired, and that teenagers from "respectable" backgrounds will be the ones to work at fast food restaurants, displacing teenagers who might be in more desperate circumstances.

These concerns are not merely hypothetical. Even many economists in favor of the wage hike agree that raising the minimum wage will affect the turnover of workers. For example, one of the leading revisionist authors, Arindrajit Dube, says that in one of his earlier co-authored studies "we... find that both hires and separations of low-wage workers (teens, restaurant workers) fall in response to [a] minimum wage increase, but employment levels do not change noticeably."5

Finally, I will point to his objections to revisionist literature on the subject, which I think adds nicely to my initial objections to the popular perception that economics shows it has no effect:

I will not attempt an exhaustive survey of the literature, but I do want to explain the main issues. First, a straightforward regression approach seems to validate the textbook treatment: hikes in the minimum wage are associated with a negative effect on the level of employment. This is intuitive, as it simply illustrates that demand curves in general slope downward. However, the revisionist studies argue that such a finding is spurious because of heterogeneity in the states that raise their minimum wage above the federal level. Once we refine the regressions to account for other factors that could affect employment, they argue, it is no longer obvious that hikes in the minimum wage retain any explanatory power.

To get a flavor of the disputes, we need to introduce some econometric terms. Introducing more independent variables into the regression for each of the items listed below isolates any remaining effect that could be explained by the minimum wage hikes.

Time trends: One can introduce a variable for the time period, so that national trends (such as the business cycle) will not distort the apparent effect of the minimum wage.

State-specific fixed effects: One can introduce a variable for each state, to account for permanent differences between them. For example, Florida has nicer weather than Minnesota, and so we would not want to try to explain faster employment growth in Florida solely by the minimum wage in both states.

State-specific time trends: One can introduce a variable for each state per time period, to prevent the minimum wage variable from apparently accounting for the changes in employment that are actually being driven by something else. For example, the loss of competitiveness by the Detroit automakers might cause a downward trend in employment in Michigan relative to other states over a certain time period. This is not a state-specific fixed effect because it is not a permanent feature of Michigan versus other states. Yet a national time trend would also miss it. Absent a state-specific time trend—where there are variables for Michigan-2008 first quarter, Michigan-2008 second quarter, etc., if we are using quarterly data—if Michigan just so happened to raise its minimum wage in the middle of the decline, then a regression might unfairly blame this policy move for too much of the (relative) decline in teen employment.

Construction of control groups: One of the most advanced techniques is to construct pairs of contiguous counties lying on opposite sides of a state border. This is the favored method of Dube et al. (2010) and subsequent articles; it is a generalization of the "case study" approach of Card and Krueger's famous 1994 paper. Dube and his co-authors argue that regressions run on this smaller universe (rather than on the entire set of counties for which we have data) give a much crisper indication of the true effect of minimum wage hikes.

Now that I've reviewed some of the terminology and methodological issues, I can summarize some of the key arguments. Dube et al. (2010) concede that if we rely merely on general time trends and regional fixed effects, we will, indeed, see the old consensus: the minimum wage destroys low-skilled jobs. Yet if we include regional-specific trends indexed by time period, the influence of the minimum wage begins to disappear and, in particular, using their preferred control group method (of contiguous county pairs) completely obliterates the textbook finding. The minimum wage may even have a positive impact on employment.

On the other hand, Neumark and Salas (2013) provide a summary and critique of the revisionist studies. For example, they show that the results of Allegretto et al. (2011) depend on a very particular choice of time period and on a particular "functional form" of the state-specific time trend. If Allegretto et al.'s same regression were run on a different portion of the time period they chose (which had recessions at the start and end), then the minimum wage would appear to hurt teen employment after all. Moreover, even using Allegretto et al.'s original time period, Neumark and Salas merely allowed the state trend variable to be a higher order (not just linear), and, once again, the result was that the minimum wage hurt employment. As Neumark and Salas put it, "Thus, [Allegretto et al.'s] claim that underlying trends that vary by state generate spurious evidence of negative minimum wage effects on teen employment is clearly not true. Rather, only with a very specific form of controlling for this spatial heterogeneity" do the revisionist results hold up.6

Neumark and Salas directly tackle the contiguous county control group method, but their arguments are difficult to summarize concisely. What we should note is their general warning about Dube et al.'s desire to control for "spatial heterogeneity." Dube himself unwittingly demonstrates the huge potential pitfall when he argues, "[S]tates that have raised the minimum wage more over the past several decades are systematically different from other states." Then, as one example, he says that "they have experienced... sharper reduction in jobs involving routine tasks."7 Since this type of "state-specific trend" is quite plausibly the result of a state government raising its minimum wage relative to its peers, including these types of "controls" in the regression might mask the policy's true effect.

In a very recent working paper, Meer and West (2013) make a different point that highlights the dangers in relying too heavily on a particular econometric specification. It is plausible that a hike in the minimum wage would show up primarily as a reduction in the growth rate of employment, rather than as a sudden drop in the absolute level. Why? For starters, it might hurt morale if a manager suddenly laid off ten percent of the staff following a hike in the minimum wage; instead he or she might decide to slow the rate of new hires and automate more, thereby hiring fewer workers than otherwise. Also, if the level of employment would have risen in the absence of the minimum wage hike, then a reduction in the level relative to the counterfactual trend might appear in the (coarse) data merely as a slowdown in growth, not as an absolute drop in the level.

Although it may seem counterintuitive, if the true effect of the minimum wage is to permanently lower the growth rate of employment, then a regression analysis looking for the impact on the level of employment may find virtually nothing. In their appendices, Meer and West give good illustrations of why this could happen.8 They revisit the data, including many of the control variables recommended by the revisionist authors—even including regional-specific time trends—and find that minimum wage increases do reduce the growth rate of jobs. However, if, instead, they look at the level of employment, they are able to reproduce the results in the revisionist literature—namely, that the minimum wage appears to have no significant effect once enough control variables are added to the regression.

"Suffering lies not with inequality, but with dependence." -Voltaire

"Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton

I can't check right now but did I actually say the CBs 'mandated' or that portions of how they are to be applied are mandated by law? I'm pretty sure I mean the latter sense. I haven't reviewed the other countries yet to see if that is the case but I definitely don't recall either Norway or Austria going that far.

Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

Originally Posted by JimJones8934

But the country doesn't really matter because my argument is collectively some (or maybe all) of the countries you listed do have legal constraints.

Your claim was that your link showed that Norway's collective bargaining was enforced by law. Please support or retract that claim.

So far you have only showed that one of the countries listed has a CB agreement that applies by law. You haven't shown that it applies to a large segment of workers or that those workers are low skilled workers. You haven't shown the legal status of CB agreements in any of the other countries so far. Please offer that evidence or modify your claim here.

Originally Posted by JJ

I can't check right now but did I actually say the CBs 'mandated' or that portions of how they are to be applied are mandated by law? I'm pretty sure I mean the latter sense. I haven't reviewed the other countries yet to see if that is the case but I definitely don't recall either Norway or Austria going that far.

Fine, but I've offered you six or so posts to support that claim and you have yet to do so. Please either support that claim in your next post or retract it.

"Suffering lies not with inequality, but with dependence." -Voltaire

"Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton

Increasing the Minimum Wage hurts those most vulnerable in our society.

Originally Posted by Squatch347

Your claim was that your link showed that Norway's collective bargaining was enforced by law. Please support or retract that claim.

Please show exactly where that quote is.

So far you have only showed that one of the countries listed has a CB agreement that applies by law. You haven't shown that it applies to a large segment of workers or that those workers are low skilled workers. You haven't shown the legal status of CB agreements in any of the other countries so far. Please offer that evidence or modify your claim here.

I'm not sure why that is necessary. My goal is to show that there are countries you listed that do not that match your claims of not having government involvement of some kind. The degree of involvement required or not required is your burden to refine. Since you made the blanket statements, it's you that need to modify your case.

Fine, but I've offered you six or so posts to support that claim and you have yet to do so. Please either support that claim in your next post or retract it.

Which claim? That the CBs are government mandated (which I'm pretty sure I didn't do) or that the government is involved in laws governing how they are to operate (which I did above but associated to the wrong country of origin)?

If the former then quote where I have said that. If the latter then the scenario above should suffice - you are just arguing degrees so the point stands.

Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

Originally Posted by Squatch347

Not really. In fact, it assumes the opposite. I fully recognize (and point out in this thread) that current employees have an incentive to limit their competition and will do so with regulation when offered the chance. There is no real difference here between employees seeking to price out competition and employers using regulations to erect barriers to entry to prevent new companies from competing. It is no accidence that both of these principles are discussed in the same chapter in micro-economics books.

But that doesn't mean that we as a society do not have a responsibility or interest in the hiring of future workers.

Yes, I'll agree with all of that - you can't have a game of basketball without rules, yes.

What responsibility does the employee have towards the company's growth?

I'm not sure why that is necessary. My goal is to show that there are countries you listed that do not that match your claims of not having government involvement of some kind. The degree of involvement required or not required is your burden to refine. Since you made the blanket statements, it's you that need to modify your case.

You have made a claim that the explanation offered is mitigated by the presence of Collective Bargaining agreements. In order for that objection to be valid, those agreements would need to be relevant to the data provided. IE, be widespread and apply to the low skilled worker population by law, thereby acting in the same manner a minimum wage would. If you can't show that, your objection isn't a valid one. You need to show why the CB agreements in the countries without a minimum wage is similar in its economic effects.

Originally Posted by CowboyX

Yes, I'll agree with all of that - you can't have a game of basketball without rules, yes.

I agree with that the question is whether the rules take the form of Law or Legislation in the Hayekian sense. Laws (which are the informal body of rules developed by the participants to maximize value) tend to be far more effective than Legislation (codified rules set up by the Legislature to maximize political benefit).

The question when answering this is which would you like to maximize, economic well being or political well being?

Originally Posted by Cowboy

What responsibility does the employee have towards the company's growth?

None at all, why would you suspect that I think they would? I am simply noting that when the Legislature makes a minimum wage ruling they are benefiting the current employee by harming the future employee. I'm not saying the current employee is wrong for that benefit, I'm saying the Legislature is.

Status of Debate

Since we have sidled down a few rabbit holes I though I would offer a status of the current discussion for any lurkers.

I have offered 14 arguments and 3 rebuttals for possible objections in favor of the proposition that the minimum wage negatively affects employment for those workers most vulnerable to economic fluctuations, low skilled workers. These arguments are present in the OP, OP Part II, and Additional Data and Argumentation posts.

There have been 0 argument offered here that the minimum wage does notnegatively affects employment for those workers most vulnerable to economic fluctuations, low skilled workers.

There has been 2 objections to arguments I have raised. One is that the first set of data on European unemployment could be unreliable due to the hypothesized existence of collective bargaining agreements. I Have rebutted that objection, but the debate is still on going.

The other objection revolved around the idea that a decrease in retained earnings would affect future hiring presumes that future hiring is possible. This objection seems to have been resolved.

Given this, the current scorecard is:

1) Arguments for OP: 14

2) Argument Against OP: 0

3) Objections to 1): 2

4) Net Arguments for OP (presuming objections remove argument): 12

"Suffering lies not with inequality, but with dependence." -Voltaire

"Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton

Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

Yes, but that can't be read to say that the CBs "was enforced by law" as you are trying to claim I'm saying. This is specifically saying that there are laws that govern the CB's applicability to other companies or employees within that sector.

Norway

Legal context

The Norwegian collective bargaining system may be characterised as a centralised one. Strong

main confederations on both the employee and employer side, together with the nationwide trade

union federations and employer associations, still play an important role in collective bargaining.

This system has not been significantly challenged by any of the labour market parties. Norway

has a long tradition of different types of incomes policy (tripartite cooperation involving the

labour market parties and the government), social reforms and measures often forming part of the

negotiation process. Nationwide collective agreements dominate, but in large parts of the private

sector these agreements are supplemented by company-level negotiations. Norway has no

tradition of extending collective agreements to the non-organised parts of the labour market; nor

does it have a statutory minimum wage. An exception has been made in recent years when it was

decided to make provisions in collective agreements generally applicable in cases where foreign

workers are subject to less favourable terms of contract than is customary in the industry. Since

the first decision in 2004 related to seven land-based petroleum sites (NO0411103F), it has been

decided to make collective agreements applicable in the construction sector, the shipyards, the

So it is not true that Norwegian CB system is entirely economically driven. In addition to other actual labor laws, there are statutes that define where they are applicable outside of the original agreements between the two parties.

You have made a claim that the explanation offered is mitigated by the presence of Collective Bargaining agreements. In order for that objection to be valid, those agreements would need to be relevant to the data provided. IE, be widespread and apply to the low skilled worker population by law, thereby acting in the same manner a minimum wage would. If you can't show that, your objection isn't a valid one. You need to show why the CB agreements in the countries without a minimum wage is similar in its economic effects.

Nope - it is you making an overly broad claim and it is my purpose to reduce it. And I already have:

That minimum wage meant government mandated minimums (perhaps obvious to you but not to me)

That CBs are valid, but only under certain circumstances, so that your argument isn't anti-MW at all but really pro-economic forces or maybe anti-government, anti-law, anti-regulations.

Your argument only applies to low-skilled workers (#30)

That they must only economically driven and not legally mandated (#30) & (#33 - fellesforbundet is the union representing construction, farming, hotels and restaurant sectors).

That's pretty far from your restatement of your argument (the third, I think) is "the minimum wage negatively affects employment for those workers most vulnerable to economic fluctuations, low skilled workers." There are conditions to your statement in order for it to match the evidence you are purporting to support that statement.

You may drop the evidence if you feel that you have to keep qualifying your argument in order to make the evidence fit it but for my part, it is sufficient for me to find one example in any of the 9 countries to dismiss the evidence (or have you further restrict your original broad statement to exclude it).

So please stick to that last statement and refine it accordingly once we have established that there are indeed laws that govern those outside of the CB agreement. Or you can accept that there are laws and we can move on.

Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

Originally Posted by JimJones8934

Yes, but that can't be read to say that the CBs "was enforced by law" as you are trying to claim I'm saying. This is specifically saying that there are laws that govern the CB's applicability to other companies or employees within that sector.

I see that you are honoring the opening of the Olympics with this feat of mental gymnastics.

Please support or retract that the link you offered in post 29 says that "they apply to other companies or employees within that sector by law" as you stated in post 31.

Originally Posted by JJ

So it is not true that Norwegian CB system is entirely economically driven. In addition to other actual labor laws, there are statutes that define where they are applicable outside of the original agreements between the two parties.

This objection fails on several grounds.

1) It does not show that these agreements cover industries that employ low skilled labor (with out this link your argument is an apples and oranges fallacy).

2) It does not show that there are statutes or legally mandated. The extension to unorganized labor was taken (according to your link) on the part of the labor federation (not a governmental body).

Originally Posted by JJ

Nope - it is you making an overly broad claim and it is my purpose to reduce it.

This is an incorrect understanding of logical structuring and basic argumentation. I have offered a positive claim about the difference in employment rates between European nations. You are attempting to rebut that claim with a positive claim of your own (that CB agreements act in a manner similar to minimum wage). Because you are acting on the rebuttal position does not mean that you are not responsible for supporting your own claim or that your claim is therefore not a positive one.

Originally Posted by JJ

[*]That CBs are valid, but only under certain circumstances, so that your argument isn't anti-MW at all but really pro-economic forces or maybe anti-government, anti-law, anti-regulations.

Given the definition above, you have already conceded that a CB agreement isn't a minimum wage. CB agreements are contracts between parties, not legislated wage rates. By this definition my acceptance of an offer for employment constitutes a minimum wage. In fact, your misunderstanding could be construed to go as far as saying that purchasing of an item (a contract) constitutes a price floor (and bizarrely) ceiling on that good.

Minimum wages are legislated labor rates that apply to all people regardless of circumstance.

CB agreements are contracts between parties that establish an excepted purchase price (and other conditions) for labor. They apply only to the parties at hand and not arbitrarily to all parties, everywhere like a minimum wage.

Originally Posted by JJ

[*]Your argument only applies to low-skilled workers (#30)

You could well have referenced Post 1 since that also references that this argument primarily effects lower skilled workers whose market labor rate might be below the legislated minimum wage. It isn't so much that you "got this statement out of me" as "you finally read that section of the OP when I requoted it to you."

Where did I say that other restrictions (slavery being a different category than the other ones you mention here because it does not reflect a mutually beneficial arrangement voluntarily entered in to) on voluntary association or disassociation were "fine?"

Originally Posted by JJ

That's pretty far from your restatement of your argument (the third, I think) is "the minimum wage negatively affects employment for those workers most vulnerable to economic fluctuations, low skilled workers." There are conditions to your statement in order for it to match the evidence you are purporting to support that statement.

And none of the logically coherent (as opposed to the non-coherent) points above change that statement or the evidence offered. Nothing you have offered here fundamentally challenges either my conclusion or the bulk of the evidence offered.

You have, at very best, called into question the scale of the effect in one data set of more than 14 offered. Not the effect itself, just the magnitude of the effect.

Originally Posted by JJ

You may drop the evidence if you feel that you have to keep qualifying your argument in order to make the evidence fit it but for my part, it is sufficient for me to find one example in any of the 9 countries to dismiss the evidence (or have you further restrict your original broad statement to exclude it).

Whether the data set is convincing to you personally or not is irrelevant. If you find it unconvincing (as I said on page one) feel free to reject it personally and respond to the rest of the argument.

Alternatively, I would be very pleased to turn this into a moderated, one on one debate in our forum with judges to vote who has the best argument. Are you game?

"Suffering lies not with inequality, but with dependence." -Voltaire

"Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton

Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

Originally Posted by Squatch347

I see that you are honoring the opening of the Olympics with this feat of mental gymnastics.

Please support or retract that the link you offered in post 29 says that "they apply to other companies or employees within that sector by law" as you stated in post 31.

I have already answered this in the last post - just to make sure that you don't have as much of a reading problem with what I have to say as you do your own arguments, please quote any objects to the information already provided.

Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

Contrary to most merchants, Costco is siding with Obama in his call to increase the federal minimum wage] to $9 an hour. In fact, it would do the President one better, supporting a minimum hourly wage of $10.10.

Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

JJ, you have yet to support the claim you made in post 31, until you do so that point has not been supported.

You also have offered no evidence or reasoning to reject the 17 other argument offered in support of the OP.

Finally, you have not offered an alternative unit of measure as to the benefit of the minimum wage that would outweigh the economic one offered in the OP.

Thus, I see no coherent objection to the conclusion in the OP offered thus far.

Originally Posted by sarabrown

Contrary to most merchants, Costco is siding with Obama in his call to increase the federal minimum wage] to $9 an hour. In fact, it would do the President one better, supporting a minimum hourly wage of $10.10.

Well Costco isn't affected by the Federal Minimum wage change so it isn't a cost issue for them. As for a more general increase Costco's support isn't a socially aware policy it is a competitive policy. It isn't an accident that the types of companies that support higher minimum wages tend to be those at the higher end of the brand scale in that industry. Costcos and Ace Hardware for example. Why do they do that? Because their strategy is to employer higher skilled workers than their competitors and profit off of the additional value. By mandating that their competitors compete in the same manner as their business plan they are attempting to legislate an advantage to themselves.

To quote an economist responding to almost this exact point:

Ms. Gina Schaefer,
Washington, DC

Dear Ms. Schaefer:

You’re identified in a mass e-mail, sent by “Business for a Fair Minimum Wage,” as “co-owner of nine ACE Hardware stores in Washington DC and Maryland.” And you also signed a petition calling for a higher minimum wage – a stance that you justify with the following argument:

“We have nearly 200 employees and our starting wage for sales associates is $10 an hour. That helps us attract and retain employees who deliver the great service that draws large numbers of customers to our stores and enables us to stay competitive. Increasing the minimum wage will help promote a healthy, dedicated workforce and keep more dollars circulating in our local economy.”

Your statement raises many questions. For example: if all employers would be better able to “stay competitive” by paying all of their workers wages above the current minimum, why do they not already do so? After all, you now pay such higher wages. Why do you suppose that your particular business plan will work equally well for other firms? Asked differently, why do you presume that other business owners are so inept that they’re leaving easy money on the table?

If history is any guide, you – a business owner who supports a higher minimum wage – actually presume no such ineptness on the part of your competitors. Your support for raising the minimum wage is almost surely driven by your wish to increase your profitability by throttling your competitors. Quite likely, your rivals now profitably use business plans that rely more heavily than does your plan upon the use of low-skilled workers. Because your workers already earn wages at or above the proposed higher minimum, your costs will be unaffected by a hike in the minimum wage. Your competitors, however, won’t be so lucky. When their costs are forcibly raised, they’ll be less able to compete effectively with you for customers. Some rivals will exit the industry while others scale down their operations.

Your enhanced profitability, in other words, will be extracted from the hides not only of your hapless competitors but also from the many low-skilled workers whose employment prospects will shrink – and all while you wear a cloak of faux altruism that, sadly, fools the gullible into thinking that you’re a friend of the poor.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

I'm not sure I would agree with that. I think support for the minimum wage is not due to a lack of a moral compass, but rather a relatively common cognitive bias. Sometimes called the "at hand" bias this cognitive bias disproportionately weighs affects that can be seen over their contrapositive. IE I see the benefit for the guy who makes a higher wage and I weigh that higher than the harm caused by the guy who loses his job because it is far more difficult to identify him.

Either way, this seems like an over the top moral condemnation. What about you supporting mandatory unemployment for low skilled workers is moral?

"Suffering lies not with inequality, but with dependence." -Voltaire

"Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton

Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

Originally Posted by Squatch347

JJ, you have yet to support the claim you made in post 31, until you do so that point has not been supported.

What claim specifically?

You also have offered no evidence or reasoning to reject the 17 other argument offered in support of the OP.

I already explained that if the evidence doesn't fit to support your point then it needs to be dropped, yet you still hold it valid. Note also, you have made a statement regarding what you said in this thread that doesn't seem to ring true - to continue any further on any matters is pointless if you can make such denials.